Pushed to one side of the talks aimed at reducing the federal deficit is the nettlesome question of how to account for the savings and loan cleanup in the budget.

So far, members of Congress and Bush administration officials at the center of budget talks have focused on taxes and entitlements, but the handling of the cost of the S&L mess looms large over the negotiations.

The problem cannot be avoided entirely. The Resolution Trust Corp., the agency charged with cleaning up the savings and loan industry, will run out of money early in the next fiscal year, which starts Oct. 1. And the administration says it will need about $62.3 billion next year.

The mid-session review this week by the Office of Management and Budget underscored the immense importance of how to account for the savings and loan cleanup -- and the reluctance of the administration to back a particular method for fear of being accused of sweeping the problem under the rug.

"If you look at it in this budget, we've done it both ways," said OMB Director Richard G. Darman. "For those who like it one way, they can count it one way. For those who like it the other way, they can count it the other way. There is no escaping; whichever way you count it, you have a big problem."

This is no ordinary accounting issue.

How Congress and the administration settle it has enormous consequences because the Gramm-Rudman-Hollings deficit reduction law mandates automatic spending cuts if the deficit exceeds certain targets. If the budget talks deadlocked and led to automatic cuts, the savings and loan accounting issue could be big enough to swallow entire government departments, scores of programs, hundreds of thousands of employees and millions of recipients of government assistance.

"Even without the S&Ls, it's a $100 billion sequester," said Darman, using the term for the automatic spending cuts that Gramm-Rudman-Hollings mandates. "With it, it's more than $150 billion."

"The numbers are so big, there is an air of unreality about it all," said Carol Cox of the Committee for a Responsible Budget.

The last time Congress and the administration wrestled over the problem of how to pay for the savings and loan cleanup, they reached an awkward compromise. Congress made available $50 billion for the cleanup, but it put $20 billion on budget and financed $30 billion off budget by creating a quasi-governmental agency to borrow funds.

The off-budget borrowings have turned out to be more expensive than normal government borrowing and thus increased the cost of the thrift cleanup.

Some budget analysts have advocated leaving the RTC's working capital off the budget, because the agency should get that money back when it sells assets seized from insolvent thrifts. Those analysts would count only RTC losses and the interest costs paid on the working capital. But that would make treatment of the RTC different from other programs, such as certain farm and student programs, which are similar but are counted on budget.

Putting the full amount of the cleanup in the budget, however, throws the entire budget out of whack. It makes the budget deficit appear much bigger in fiscal years 1991 and 1992, but if the RTC eventually manages to sell substantial amounts of the thrift assets it seizes, it could reap cash revenue that could reduce the size of the deficit by $41.5 billion in 1994.

"This is one of the perversities of the S&L issue," Darman said. "Some people think it should be taken off because it would reduce the deficit artificially. Some think it should be taken off because they say it would increase the deficit artificially."

It is unlikely that the administration would back additional off-budget borrowing to meet S&L costs. "That is what we technical experts call a sham," said one administration budget writer, "and the administration is not going to propose another sham."

Darman himself, however, has been reluctant to propose anything at all, saying that the Bush administration isn't regarded as neutral, and fearing that any administration proposals would be attacked by Congress.

Alice Rivlin, a senior fellow at the Brookings Institution and former head of the Congressional Budget Office, said the savings and loan cleanup "is happening and it is real money. Having it off budget is pretending it's not happening." Rivlin added that she would include it in the budget, but adjust the Gramm-Rudman-Hollings deficit targets so that the thrift cleanup wouldn't be a factor. "It doesn't have the same effect as borrowing for other purposes," she said, because the money borrowed is going back into the credit markets.